Cost Management
This chapter discusses how costs are managed.
Overview
Introduces cost management.
Creating Multiple Cost SetsSet up GL, current, and simulation cost sets.
Multi-Element CostingCreate cost elements for GL and current cost sets.
Comparing Cost Sets
Compare the active GL cost set with simulated or historical GL cost sets.
Cost SimulationSet up different cost scenarios and test the impact of cost changes.
Cost PlanningPhase in different GL cost sets.
Cost LinkingSpecify default cost source sites for items at multiple sites.
Overview
You can use Cost Management functions to create and maintain an unlimited number of cost sets. Use additional cost sets to:
• Create and maintain different GL and current cost sets for each site and use different GL and current costing methods. Only one GL and current cost set can be active for each site.
• Establish cost planning sets to be automatically activated at specified dates to recognize expected material or other cost changes.
• Develop simulated item costs for planning purposes to evaluate the effects of differing scenarios, such as material price inflation, batch sizing, and labor or burden rate changes.
• Retain inactive cost sets for historical comparative purposes.
• Maintain frozen standard costs. Unlike GL costs, frozen standard costs do not change during the accounting fiscal year. Frozen costs and GL costs are identical at the beginning of the accounting year. The original standard costs at the start of a fiscal period can be retained as an historical cost set.
Cost Management also lets you create additional cost elements in the five cost categories—material, labor, burden, overhead, and subcontract. These provide additional reporting detail.